Recent posting by SimeDarbyWatch and Rocky's Bru highlighted yet again, another trading losses incurred by Sime Darby amounting to RM 80 million following the previous incident of RM120 million trading losses incurred by Golden Hope prior to merger which had resulted in 4 top executives being sacked.
Trading losses is quite common for companies dealing with commodities such as crude oil and palm oil due to market volatility. Despite of stringent standard operating procedures and guidelines, the best analysts or traders in the world could still suffer losses due to varying circumstances and market volatility. For instance, when the government decided to increase the petrol price by 40 % a few months ago when the crude oil reached its historical high at about USD 150 a barrel, who could have predicted that crude oil price would nosedive below USD 80 a barrel just a few months later.
Hence, trading losses like what incurred by Sime Darby should be investigated thoroughly so as to determine the contributing factors rather than every time there is a trading loss, some body's head will roll. Even the best analyst in the world could not precisely predict the price trend of commodities due to complexity of the supply-demand chain. Let's be fair to those traders who work under very stressful conditions, they are not fortune tellers, neither are they a Warren Buffet or George Soros.
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